TIF deal on the docket

By Duke Harrington Staff Writer

Plans to create a tax increment financing (TIF) district to aid construction of a housing development on the site of the Scarborough Downs harness racing track, and to foster development of a downtown anchored by a multi-purpose community center, are raising some eyebrows among regular town hall observers in Scarborough.

Scarborough Town Council is scheduled to take a first look at the proposed TIF package during a workshop session held prior to its regular meeting on Wednesday, Aug. 15. The workshop starts at 5:30 p.m., with the gavel set to fall on regular business at 7.

“We’ve allowed for 90 minutes, but the presentation and questions from the council will likely take up most of that I would presume. So, I don’t know how much time there will be for questions from the public,” Town Manager Tom Hall said on Tuesday.

Hall said he had spent “about six hours” earlier that day negotiating terms of the proposed TIF with owners and representatives of Crossroads Holdings, a partnership that includes Peter and Richard Michaud, along with William, Marco, and Rocco Risbara of Risbara Bros. Construction.

Crossroads Holdings completed its purchase of the 500-plus acre Scarborough Downs property in January, paying $6.7 million. On June 25, the planning board gave its assent to the first 30-home phase of development.

According to Dan Bacon, a former town planner for Scarborough, now a planning project manager at South Portland engineering firm Gorrill Palmer, the completed first phase will include 56 multi-family apartment units, 24 condominium units and 24 duplex cottage units and a 12- bed memory care facility, in addition to the 30 newly approved single family homes, all to be built on 57 acres abutting Route 1 at Enterprise Drive and Sawyer Drive.

The overall plan envisions commercial and light industrial uses in the northern part of the property along Payne Road, near I-95, with a shopping center with business offices in the western part of the site, with more residential housing, to include an assisted-living facility, to the east.

The harness racing track on the central part of the property will remain up and running for at least two more years.

Hall said current plans call for the new “downtown” area to go about where the track now stands, with the community center roughly in place of the grandstands.

About 40 percent of the property is pegged to remain as open space, to include a trail system on the site, leading to Oak Hill and to state-owned land managed by the Maine Department of Inland Fisheries and Wildlife.

Town Planner Jay Chace said the town is working with the Scarborough Housing Alliance to create a program for affordable home ownership. As part of the project, 10 percent of the housing units must be affordable — generally defined to mean costing no more than 28 percent of gross household income for residents earning 80 percent of the median household income in the Greater Portland area.

Hall said the TIF package will likely be a 30-year deal which would return a portion of the property tax revenue attributed to increase value from the new development to the Crossroads owners. The rest would go to the town, and could be used to pay for economic development projects and construction of town-owned infrastructure within the boundaries TIF district.

Hall said those exact percentages are still to be determined. There is a possibility, he said, that a final agreement will not be in place for the Aug. 15 workshop, in which case council review would be pushed off for two weeks. Although time for public comment may be limited at the workshop, Hall noted there will be time for residents and interested parties to have their say at two upcoming meetings, a public hearing held during a regular council meeting, and at the subsequent session, when the council casts its vote to approve or deny the contract.

The TIF package, once adopted by the council, will still need a green light from the state. The council vote could come as soon as September.

“In my estimation, this is something that will happen sooner, rather than later,” Hall said.

Calling creation of a traditional village main street an “obsession” among some town officials,

“But the real hook for this proposed new TIF is that it will be used to finance a $20 million community center facility for the town,” Hartwell wrote. “It will be portrayed as being of no cost to the taxpayers; that we’ll be using someone else’s money. Please don’t be fooled by this line. As with lunches, there is no such thing as a free $20 million community center.”

Hall said something similar in size and scope to the South Portland Community Center on Nelson Road next to South Portland High School is on the conceptual drawing board. But otherwise, Hall has “no idea where that ($20 million) amount comes from,” he said.

On the other hand, Hall said, $20, “is probably not an unreasonable number for discussion purposes,” given that any construction of any community center will probably not begin for “seven or eight or nine years.”

“I think it needs to be a community driven process as to what is in that (building),” Hall said.

Brian Kanode, a spokesman for the watchdog group Concerned Taxpayers of Scarborough, said his group wants to see the actual proposal before commenting. He said group members are watching the issue with a wary eye.

Of concern to many is how a good idea can go south in a hurry, given unforseen sifits in the economic winds. When a similar TIF along the Haigis Parkway corridor that links Route 1 to the Maine Turnpike was put in place, it envisioned a string of corporate headquarter campuses rising up to lift all boats. But a host of circumstances, not the least of which was the Great Recession, conspired to keep that dream from making the leap into reality. Eventually, the town was forced to amend zoning to allow for a wider array of uses and the Parkway remains underutilized to this day.

Revenue to the town from its share of TIF proceeds was expected to cover some of the costs the town incurred in upgrading the parkway to entice development. But what little did come in was never enough to make the resulting bond payments. Estimates from many Concerned Taxpayer members has pegged the resulting hit to the taxpayers at $2.9 to $3 million.

In May 2017, Moody’s Investors Service assigned an Aa3 rating to $2.9 million in 2017 general obligation bonds taken by Scarborough, to go with its similar rating on $88.9 million of outstanding general obligation debt for the town.

Among the credit challenges it cited was an “outstanding general fund subsidy due to TIF district debt.”

It also suggested a future downgrade could come from “material increase in the general fund receivable due from the Haigis Parkway TIF fund.”

Hall said a TIF deal is the best means of enabling the project and fostering a greater sense of community, as the town works to enable what can be viewed as a sort of reverse-sprawl project.

“It’s about placemaking. Creating an area with enough activity and things to do that people want to be there,” Hall said. “Apart from the need for a community center, the No. 1 comment I’ve heard from residents during my time here is the need for a main street other than Route 1. Scarborough has so many beautiful attributes, yet we don’t have a recognizable, definable downtown area. Oak Hill is the closest to that in some respects, but that’s really marred by Route 1, which dominates it.”

Hall agrees that Scarborough needs to tred carefully, with the next few steps being critical.

“This is really once-ina career opportunity, and maybe a once-in-a-town’shistory opportunity, to work with a private developer to create such a place,” Hall said. “It will be a challenge. Yeah, most downtowns happen kind of organically. But if you look around the nation there’s any number of failed examples that show where they didn’t get it right. So, we’ve got to be really particular about how this planning effort goes, to make it viable and self-sustaining.”